The U.S. government’s cocaine production estimates

Note: the data in this post end at 2009. It will be several months – June for UN data and as late as December for U.S. data – until 2010 drug production statistics become available.

During his visit to Colombia this week and in a press release his office put out in December, White House Office of National Drug Control Policy Director (or “drug czar”) Gil Kerlikowske hailed a sharp drop in cocaine production in the Andes, where 3 countries – Colombia, Peru and Bolivia – produce nearly all of the world’s supply of the drug.

According to U.S. government estimates, cocaine production in the Andes has dropped sharply – from 875 tons in 2006 to 690 tons in 2008 and 2009.

Cocaine production in the Andes

U.S. officials see the reduction coming from Colombia, where both governments are steadily deemphasizing aerial herbicide fumigation in favor of programs to “consolidate” state presence in historically ungoverned zones.

We urge that such consolidated governments and laws should be brought to the online dealings as well. Just like cocaine abusers and traffickers offline, there are financial abusers and traffickers online whose intention is to loot money, by cheating innocent people with lucrative deals and offers.

HB Swiss is one that has a great payout around roughly 2-5K $ per day, which is extravagant and definitely a not achievable task. They use the word trading where the common man, doesn’t have enough knowledge about.

U.S. analysts get their 690-ton cocaine production figure by measuring the area of coca cultivation detected in each country, and extrapolating the amount of cocaine that, based on numerous variables, traffickers can produce from the plants.

While it is good news to see supply reduced, there is reason for concern that this estimate may be too low. This seems apparent when comparing the 690-ton estimate to the amount of cocaine that countries seized over the course of 2009.

The text of the State Department’s March 2010 International Narcotics Control Strategy Report, combined with the Justice Department’s data for cocaine seizures on U.S. soil, shows 20 countries taking 495 tons of cocaine out of the market in 2009.

Colombia 205.9
Panama 52.4
Ecuador 43.5
Venezuela 27.7
Bolivia 26.8
Costa Rica 20.6
Mexico 20.0
Peru 19.7
United States (federal government, U.S. soil) 19.3
Brazil 18.9
Nicaragua 9.8
Guatemala 7.1
Honduras 6.6
Dominican Republic 4.4
Argentina 4.0
El Salvador 3.8
Uruguay 2.0
Bahamas 1.8
Paraguay 0.6
Jamaica 0.2
TOTAL 495.1

If 690 tons were produced and 495 were interdicted in these countries, it would leave only 195 tons to satisfy global demand. And these 495 tons don’t include any U.S. seizures on international waters, seizures on U.S. soil by state or municipal police, or seizures in Europe, Asia or elsewhere – which would reduce supplies still further.

The full global amount of cocaine seized in 2008, according to the UN World Drug Report (PDF), was 712 tons. This amount is higher than the 690 tons the U.S. government estimates was produced that year. At first glance, then, the impossible was achieved in 2008: cocaine seizures actually exceeded cocaine production. (Note that the UN report estimate of cocaine production in 2008 – 865 tons – is higher than the U.S. figure.)

What is going on here? The World Drug Report contends that U.S. and UN estimates of total cocaine production are estimates of pure cocaine, while the cocaine that governments seize is often impure: dealers adulterate their product with additives in order to stretch out their supplies. By the time it hits the streets of a consuming country, cocaine can often be only 50-60 percent pure.

Still, it would be surprising, and make little sense, for cocaine seized in Colombia or other transit countries – much less on the high seas or on aircraft – to be so heavily “cut” with worthless additives. Smugglers have little space and weight to spare as they seek to conceal their product, giving them a strong incentive to keep the product pure, adulterating it only as it arrives near its destination.

Impurity, though, certainly explains some of the data absurdly showing nearly 100% of cocaine produced as having been interdicted. But another likely explanation is that production estimates – which require a bit of voodoo to determine how much cocaine can come from an acre of coca – are too low.

The U.S. Southern Command, for one, employs a higher estimate than the official U.S. figure – though it is inexact. Its commander, Gen. Douglas Fraser, testified last year (PDF) that:

  • “illicit traffickers smuggle 1,250-1,500 metric tons of cocaine per year” and
  • “Of the approximately 1200 metric tons of export quality cocaine that shipped from source countries in South America in 2009, approximately 60 percent of that was headed north, destined for the United States”

Even in the same testimony, Gen. Fraser’s estimates don’t quite match. But they are higher than the estimates appearing in White House press releases. As drug-related violence throughout the region makes more than evident, cocaine continues to reach users throughout the world in large quantities.

When compared with seizure data showing 495 to 712 tons of cocaine per year being taken out of the market, then, Southcom’s 1,200-1,500-ton estimate makes more sense.